To continue to support our investors and clients, and in order to comply with the second phase of the CRM Project, Sunstone commissioned an annual third party valuation report to satisfy the requirements of the new pricing regulations, under which non-trading units must have a third party fair market valuation performed by a pre-approved Certified Business Valuator or national CPA accounting firm.

Investors owning Sunstone Opportunity Funds may therefore begin seeing changes on their brokerage account statements as their brokerage begins implementing the new third party fair market values.

Previously, Sunstone’s management provided unit pricing certificates with values that used a book cost valuation methodology which differs from the third party fair market valuation methodology. A description of the different valuation methods are listed below.

Sunstone - Book Cost Values

Since 2003, Sunstone management has used an accounting method of valuation based on the investor’s initial per unit investment at the fund’s Initial Public Offering, less any per unit amounts of equity returned to date in the form of special distributions from property sales.

The balances that you see on your quarterly investor letters reflect the Sunstone book cost values.

BDO Canada LLP (“BDO”) - Fair Market Values

Sunstone units are non-trading. Their fair market values are determined not by their last trading price, but by using a methodology that combines the estimated values of each of the remaining properties based on year-end audited financials, quarter-end unaudited financials and appraisals, estimated market conditions and what each unitholder could potentially receive per unit should the remaining properties sell at a certain point in time within an assumed range of market conditions. It is these values that the brokerage firms are required to use.

These reports are prepared annually as at December 31steach year by a national CPA accounting firm, BDO Canada LLP. Reports may also be prepared at other times during the year when special distributions from property sales have been paid out to investors, creating demand for an update in pricing. In such circumstances, Sunstone may ask BDO Canada LLP to provide estimated valuation amounts.

Sale of the Grand Parkway and Embassy Suites Tempe - Special Cash Distribution

$ 98.00 USD

$ 1.00

N/A (1)

May 8, 2017

Final Cash Distribution

$ 30.68 USD

$ 0.00

N/A (2)

August 17, 2017

(1) Please Note that BDO will not be providing any further Pricing updates for this fund, as all real estate properties have been sold, and the Final cash distributions were paid out to unitholders on record on August 17, 2017.

(2) Sunstone intends to terminate and dissolve the US No. 3 Fund prior to December 31, 2017.